Tuesday, 21 March 2017

PARIS CLUB REFUND:BUHARI APPROVES RELEASE OF 50% REFUND TO STATES

The federal government has reaffirmed its
commitment to the Paris Club refund for states.

Minister of Finance Mrs Kemi Adeosun, in a
statement yesterday, said “independent monitoring of compliance with the terms
and conditions of funds released” would be “conducted in due course.”

The statement assured “the public that the
Federal Government has consistently complied with all extant rules and
regulations in the disbursement of the Paris Club refund to state governments.”

It added: ”The Federal Government’s
disbursement process is transparent and targeted at the attainment of
specific economic objectives.

“The inability of some sub-national
governments to meet salary and other obligations was considered inconsonant
with the Federal Government’s economic stimulus programme. Claims
with regard to over deductions had been made to the Federal Government, consistently
since 2005.

“The Debt Management Office (DMO)
initially requested for a period of 22 months to complete the reconciliation
and facilitate disbursement.

“However, President Muhammadu Buhari,
considering the plight of salary earners and pensioners and the need to
stimulate the economy, directed that the exercise be completed within 12
months.

”In addition, Mr. President gave an
express Anticipatory Approval for the release of up to 50% of the claim
of each state, pending final reconciliation.

“That reconciliation is undertaken by the DMO,
Office of the Accountant General of the Federation (OAGF) and the relevant
State Governments. Accordingly, the disbursements are staggered in batches and
payments are only made when the claims of each state have been reconciled
with the facts at the disposal of the Federal Government.

”Specifically, information was available
that some states had been paid either in full or in part, under previous
administrations. This necessitated a more detailed review for the states in question.

”The release of the first tranche,
representing up to 25% of claims, being N522.7 billlion, commenced in December
2016. Disbursement was subject to an agreement by State Governments that
50% of any amount received would be earmarked for the payment of salaries and
pensions.

“In addition, each governor gave an
undertaking that excess payments would be recovered from the Federal Accounts
Allocation (FAAC), if the final reconciliation found that the amount paid
under the Anticipatory Approval exceeded that due.

” It is standard practice in the
Ministry of Finance to undertake independent monitoring of compliance with the
terms and conditions of funds released. This will be conducted in due course.

”To date, nine batches have been
processed while some balances remain outstanding to the possible credit of a
number of states. “Given the foregoing, complete and final figures can only be
released and published after each state and the Federal Government have
reconciled and agreed on the sums due.

”At the National Economic Council
meeting on Thursday March 16, 2017, President Muhammadu Buhari instructed the
Minister of Finance and Central Bank Governor to commence the process of
resolving the balance of the approved amount.

“The overriding consideration for any
further releases will be the current and projected cash flows of the
Federation as well as the outcome of the independent monitoring of the
compliance with terms and conditions attached to the previous
releases.

”The Minister of Finance would like to reaffirm
the commitment of the administration to publish all relevant information on the
Paris Club refund.”